Launching in 2001—some eight years after the very first U.S.-listed ETF debuted—VTI helped set the stage for what became an industry acutely focused on costs. It also helped bring ETFs into the mainstream retail market and popularize the structure among financial advisors. Today VTI boasts roughly $55 billion in assets.

It's no surprise Vanguard would rise to become the second-largest ETF issuer, with $456 billion in ETF assets as of August 2015. The company was ahead of the game in the equity index mutual fund space back in the 1970s. When Vanguard launched VTI as a share class of its Total Stock Market Index Fund, the mutual fund was the firm's best-selling equity fund, and one of the industry's most popular.

Known for its "characteristic candor and disclosure regarding costs," as Gus Sauter, managing director of Vanguard's Quantitative Equity Group, said at the time VTI came to market, Vanguard proved with VTI and its other ETFs that keeping costs low works.

"VTI marked the entrance of Vanguard into the ETF market, opening up a new distribution channel for our indexing experience and expertise," said Martha King, managing director at Vanguard. "VTI and the low-cost Vanguard ETFs to follow in subsequent years brought additional choice to investors and much-needed cost competition to the industry."

But VTI's success—and the success of Vanguard ETFs in general—hasn't come without its challenges. Right out of the gate, there was the issue of a name. Vanguard originally named its ETFs VIPERs, for Vanguard Index Participation Equity Receipts. The not-so-cuddly image wasn't a huge success, and Vanguard rebranded in 2006.

Another obstacle Vanguard ETFs had to face was the disbelief in the ETF structure the company's founder John Bogle never hesitated to share. Bogle, an avid fan of index investing, questioned the use of trading an index fund throughout the day. To him, ETFs were for day traders and not for the long-term investor Vanguard best served. He's still vocal about that all these years later.Of note, unlike other ETF providers, Vanguard built its ETFs as share classes of existing mutual funds instead of stand-alone investment vehicles. Mutual fund shareholders were allowed to convert to ETF shares if they wanted to—a feature that appealed to Vanguard clients who already believed in index investing, but liked the feature of intraday pricing.